Do we Need Managers and Hierarchy in Agile?

In organizations that are adopting agile people sometimes state that the hierarchy should be abolished and that we should get rid of managers. They consider managers and hierarchy to be something that hinder self-organization of teams.

Steve Denning wrote the article No Managers? No Hierarchy? No Way! on Forbes in which he addresses the paradigm shift in management for supporting organizations to become more agile. He explains that there is still a need for managers in collaborative and networked kinds of organizations:

In networked organizations, where work is self-managed, there are still managers. The managers have become enablers of self-managing teams and networks rather than controllers of individuals. In those organizations, someone has to sign checks. Someone has to sign legal documents on behalf of the organization. Someone is legally responsible for what is done by the organization. That someone is a manager. A manager after all is simply someone who is responsible for getting things done. If anything is to get done, an organization has to have managers.

Getting rid of hierarchy and managers doesn’t solve the problem, asking for it can actually worsen problems as Steve mentions:

Yet I can see what colleagues mean when they cry “no more managers!” or “no more hierarchies!” They are calling for an end to all the things that we want–and need–to end, such as arrogant management attitudes, bureaucracy-infested business processes, inward-looking perspectives that ignore customers and so on.

Yet the use of phrases like “no managers!” and “no hierarchy!” (…) can be a show stopper. In conversations with people running organizations, use of those phrases often signifies to listeners that the speaker is some kind crazy person and it often brings effective communication to a screeching halt.

A manager’s prime directive shouldn’t be to manage, it should be to help and facilitate, to motivate and guide others around a vision. In other words, what growing tech companies need are leaders, not managers.

Jeff states that not changing the management hierarchy is the main cause for Scrum not to work:

Many companies make the mistake of “expecting Scrum to work by magic without any help from management,” [Jeff] explains. Instead of simply telling the teams what to do and then walking away, managers need to be active guides, laying out challenging goals for the team. Once the goals have been clearly communicated, management then needs to assume a role similar to that of an investor: find out what the team needs to achieve those goals, work to deliver on those elements, and otherwise get out of the way.

According to Jeff managers need to become leaders, coaches, and motivators in organizations that are adoption agile:

“They’re not de-motivating people by telling them what to do every day, micromanaging them, running their performance appraisals, and so forth. I think management has to change the way it thinks about business to really be successful in today’s competitive environment.”

Olga Kouzina wrote the blog post why self-organization is a luxury. She uses the metaphor of a pendulum to visualize balancing classical ways of managing organizations using hierarchy and managers versus agile approaches using flat organizations:

I felt that the agile movement and self-organization in a team is what I really needed at some point of time. However, later on I started connecting the dots in the bigger picture and saw some signs that self-organization and several other values declared in the agile manifesto are not universal laws. They rather signify the points of bounceback. There’s no universal proof that self-organization, or face-to-face communication yield the highest productivity for any company.

Self-organization is nu guarantee to deliver projects on time as Olga explains:

Lucky is a software craftsman, and lucky is a team that can afford the luxury to release at their own pace, with this deep feeling inside that they have crafted this piece to perfection. However, we live in the world that is full of constraints. A pizza-sized team of craftsmen wants to grow big, because they now want to come up with yet another awesome software. This move requires more hands, and coordination with stakeholders, internal and external ones. The noble castle of software craftsmanship is invaded by merchants, who want deadlines met and sales goals hit.

According to Olga the way to manage and lead teams depends on where an organization is on the pendulum between hierarchy and self-organizing and what their needs are to deliver projects on time:

Someone has yet to develop the balanced mix of agile and hierarchical management. This mode of pivotal operation implies razor-sharp intensity and focus in anything and everything, the foresight in knowing and defining which issues need whose attention, and when, and setting the boundaries as far as to the point of worshiping individual productive flows, that of decision-makers and that of performers. It takes some hard thinking, and taking hard choices: can we afford hitting 5 meetings with 7 people to discuss this issue? Is it worth it? Does it really matter for productivity that everyone reconciles and has the same viewpoint on any given problem? How the skills and competence of people can be applied optimally, to keep them working and have them learn new things?

Any stable, complex system will necessarily have intermediate, stable subsystems. We call this hierarchy. Anyone who is familiar with large IT systems will be familiar with this. Anyone who is familiar with Conway's Law will recognise that "no hierarchy" is akin to "Big Ball of Mud".

The underlying issue is the confusion between "hierarchy" meaning a simplistic tree versus "hierarchy" as systems and subsystems.